Constellation to Sell UniStar Stake to EDF at Bargain Price

Constellation Energy last week offered to sell its 50% stake in the UniStar joint venture to partner Électricité de France (EDF) for $1, plus $117 million in reimbursement costs—a price well below market value—in order to further the project and ensure future energy supplies for Maryland.

Constellation Vice President and COO Michael Wallace told EDF Executive Thomas Piquemal in a letter that the Baltimore-based company had anticipated “significant financial resources” needed to build a new reactor at its two-unit Calvert Cliffs site—which is why it entered into the split-ownership agreement with EDF.

He lamented, however, the “market forces” that had worked against the two companies. “The combination of the lack of a comprehensive energy policy which prices carbon, the issues associated with the loan guarantee, the significant decline in natural gas and power prices, and the rising costs of nuclear construction have brought us to this point,” Wallace wrote.

Constellation earlier this month turned down a $7.5 billion conditional loan guarantee offer from the DOE to build the EPR in Maryland, calling proposed costs associated with the proposal “too high.” In his letter to Piquemal, Wallace also added that required conditions associated with the DOE’s offer were “too burdensome to be workable for a company of our size.”

Wallace said that though Constellation would do everything it could to help EDF to move forward with the Calvert Cliffs reactor, the company preferred to deal separately with a disagreement over an existing option under which EDF would buy up to $2 billion of Constellation’s non-nuclear assets. “That commercial dispute should not be used to hold the prospect of the [Calvert Cliffs Unit 3] hostage.”

Sources: POWERnews, Constellation Energy, EDF

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